My name is Emanuel Morgan and this blog is for the new investor that is just getting started, the investor with little experience, or the investor that wants to expand their knowledge. Investing can be a tricky topic and frightening if you don’t know what you are doing. Today we’ll be focusing on why you should begin investing.
There are many reasons to begin investing, but I’ll name a few to get you started. You should begin investing to help accomplish your financial goals, create wealth, and beat inflation.
Accomplish your financial goals
Investing can help you reach your financial goals by allowing your money to work for you. Investing creates the opportunity for an individual to work smarter, not harder. When you invest your money you create the opportunity for yourself to earn dividends, interest, and capitalize on short-term and long-term gains. Before investing it may be a good idea to ask yourself what your financial goals are. This can help you decide which investments are best for you and how aggressive you want to be. Begin by asking yourself where you currently are financially and the ask yourself where you want to be in one, five years, and ten years. By understanding where you currently are you can create a more accurate picture of where you want to go.
Create wealth
Creating wealth can provide both safety and security for unexpected life expenses that occur. If your car broke down today and you needed $1,000 to get it repaired could you afford to get it fixed without going into debt, or borrowing money from friends or family? The earlier you began investing is the key creating wealth because of compound interest. “Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it” -Albert Einstein.
Beat inflation
The U.S. dollar continues to depreciate every year and this is due to inflation. A dollar today can’t buy as much as it could’ve ten years ago. Inflation runs an average of approximately 2% every year. This means if you are just saving money in a savings account you are actually losing money each year due to inflation. Investing creates an opportunity to beat inflation. For example, on average the stock market returns 8-10% and if you account for inflation you still put yourself in a position to potentially return 6-8% each year.
Conclusion
Investing involves taking risks that could result in a loss of money; however, not investing could also put you at risk to take a loss on your money. There are many reasons to begin investing. If you haven’t started investing the best thing you can do is begin to educate yourself by reading posts like this and when you are ready begin to invest a small amount that you feel comfortable with as you continue to learn and grow as an investor.
Investing Simple 